Business Daily #1408 October 24, 2017 by Business Daily

Recycling industry adapting to green vehicle features Batteries Page 10

Tuesday, October 24 2017 Year VI Nr. 1408 MOP 6.00 Publisher Paulo A. Azevedo Closing Editor Kelsey Wilhelm Hospitality

The 13 aims to raise HK$2 bln to make proposed March 2018 opening date Page 6

Legislative Assembly elects the heads of its committees for four-year term Page 2

www.macaubusiness.com

Tourism

Visitor numbers up 2.4 pct in September to 2.48 mln Page 3

Quality target

Chinese Environment minister pledges clean air by 2035 Page 9

Deceleration Results

Gross gaming revenues will ‘decelerate’ in the fourth quarter, to a 12 pct y-o-y increase, say analysts, topping out at MOP67 bln. The prediction is an improvement from previous estimates due to registered ‘VIP strength’ which has ‘continued to surprise’. Expectations are for a 17 pct annual increase for 2017. Page 7

Alibaba: cloud data not going to Mainland

The central gov’t won’t have access to data stored in a data centre to be developed by the company in the MSAR. Neither the company nor the central gov’t will have access, it says. Part of the project includes training gov’t employees to ‘increase efficiency of governance’.

Dip in restaurant/retail revenue due to typhoon Revenue Nearly 50 pct of surveyed restaurants saw a drop in revenue during August due to Typhoon Hato, while a less positive outlook exists for September. Retailers also saw decreases in August, but expressed an improved outlook for the following month. Page 2

Housing prices moderate

IT Page 5

HK Hang Seng Index October 23, 2017

28,305.88 +181.36 (+0.64%) Worst Performers

China Life Insurance Co Ltd

+3.46%

China Unicom Hong Kong

+0.36%

Industrial & Commercial

-2.22%

Wharf Holdings Ltd/The

-1.25%

Want Want China Holdings

+2.65%

Link REIT

+0.30%

Bank of East Asia Ltd/The

-2.14%

Henderson Land Develop-

-1.24%

China Merchants Port Hold-

+1.40%

Hengan International Group

China Resources Power

+0.57%

Swire Pacific LtdCorp

AAC Technologies Holdings

+0.36%

HSBC Holdings PLC

+0.13%

Geely Automobile Holdings

-2.09%

Bank of China Ltd

-1.24%

+0.13%

WH Group Ltd

-1.66%

CK Asset Holdings Ltd

-1.20%

+0.00%

AIA Group Ltd

-1.66%

China Construction Bank

-1.15%

22° 26° 22° 26° 21° 27° 22° 27° 22° 27° Today

Source: Bloomberg

Best Performers

WED

THU

I SSN 2226-8294

FRI

SAT

Source: AccuWeather

Real estate The latest official data shows China home prices rose in the fewest number of cities since January 2016. New-home prices in September, excluding government-subsidized housing, rose in 44 of the 70 cities tracked by the government, compared with 46 in August. Page 10

2 Business Daily Tuesday, October 24 2017

Macau

Sorting out the bits and pieces Legislator Angela Leong On Kei has been elected as the chairman of AL’s administrative committee, and the plenary session approved the members of the standing committees for the next four years Cecilia U cecilia.u@macaubusinessdaily.com

btaining a total of 24 votes from the Legislative Assembly (AL) during the plenary session yesterday, legislator Angela Leong On Kei was elected as the chairman of the AL’s administrative committee. For the next four years, Leong will be in charge of the financial management work, including the budget and accounts for the AL. Other legislators who received votes for the position included Ella Lei Cheng I, Kou Hoi In, Jose Chui Sai Peng, Ng Kuok Cheong, Wong Hin Fai, Lao Chi Ngai and Ho Ion Sang. Two legislators cast blank votes. Meanwhile, yesterday’s plenary session finalised the make-up of the standing committees, as well as the committee for the charter and terms of the AL. The committee for the charter and terms of the AL is comprised of legislators Kou Hoi In, Au Kam San, Vong Hin Fai, Jose Chui Sai Peng, Angela Leong On Kei, Wong Kit Cheng and Lao Chi Ngai.

Standing committees

The first standing committee, which consists of 10 legislators, now

includes Kou Hoi In, Au Kam San, Ho Ion Sang, Ma Chi Seng, Ella Lei Cheng I, Song Pek Kei, Ip Sio Kai, Iau Teng Pio, Davis Fong Ka Chio and Lam Lon Wai. The second standing committee, also consisting of 10 legislators, is comprised of Ng Kuok Cheong, Chan Chak Mo, Mak Soi Kun, Chan Iek Lap, Chan Hong, Wong Kit Cheng, Wu Chou Kit, Agnes Lam Iok Fong, Chan Wa Keong and Leong Sun Iok. Comprised of 11 legislators, the third standing committee includes Vitor Cheung Lup Kwan, Vong Hin Fai, José Pereira Coutinho, Jose Chui Sai Peng, Angela Leong On Kei, Zheng Anting, Si Ka Lon, Pang Chuan, Lao Chi Ngai, Lei Chan U and Sulu So Ka Hou. Ho Ion Sang, Chan Chak Mo and Vong Hin Fai were elected as the chairmen of the three standing committees, respectively, in closeddoor meetings after the plenary session. Ella Lei Cheng I was chosen as the head of the committee for land concessions. Si Ka Lon, on the other hand, was selected to be the head of the committee to follow-up administrative matters, and Mak Soi Kun now chairs the committee relating to public financial issues.

Legislators slam public administrative system

In the wake of the release of the CCAC (Commission Against Corruption) report on the former head of the Meteorological and Geophysical Bureau (SMG), several legislators questioned the government’s current administrative system in interpellations made during yesterday’s plenary session at the Legislative Assembly (AL). Legislator Si Ka Lon expressed in his interpellation that citizens are more concerned about the existence of measures of accountability rather than ‘who made the mistakes’, while denouncing that the government always claims that it will ‘follow up’ cases, without any concrete proposals for accountability. Newly elected legislator Leong Sun Iok urged for improvements in accountability measures, as well as in typhoon forecast procedures and internal management. Indirectly elected legislator Lei Chan U said the performance of a small number of directors and chairmen of public departments has a large impact on the overall performance of the government.

Doubts about public housing report

Legislators Ng Kuok Cheong and Ella Lei Cheng I both questioned in their interpellations the practicality of the report on the demand for public housing recently released. The report estimates that the supply of public housing will exceed demand by 2026. Speaking yesterday during the plenary session at the Legislative Assembly, Lei cited that there were over 40,000 applicants for some 1,000 economical flats in 2013, and the government had not re-opened applications for almost four years, saying that the cited numbers are proof of the high demand for economical housing. Pan-democratic legislator Ng said the recent report left out the 40,000 applicants for economical housing units who are currently still awaiting allocation.

Politics

Supplementary budget made for Macao Foundation

Disciplinary procedures against former SMG head confirmed

The MSAR Government announced the approval of the first supplementary amount of MOP1.3 billion (US$161.75 million) for this year’s budget, according to a dispatch posted in the Official Gazette yesterday. The Macao Foundation previously announced that it would disburse MOP1.35 billion from the public

coffers to support residents impacted by Typhoon Hato. Each of the subsidy amounts offered by the Macao Foundation can go up to MOP30,000 for medical support, as well as to residents who had their residential properties impacted by flooding or suffered from broken windows. C.U.

Law

Major appointer The Chief Executive has appointed Leong Fong Meng as a Presiding Judge of the Collective Court of the Court of First Instance, with her functions starting from November 1, an Official Gazette release yesterday announced. Currently a judge at the Judiciary Council of Macau, Ms. Leong was appointed after a proposal by the Independent Committee responsible for judges’ appointments. Yesterday, the Chief Executive also appointed eight new judges for the

Court of First Instance and five delegates for the Public Prosecutions Office, all starting their functions from November 1. Cases in the Court of First instance are generally judged by a single judge, or in special cases by a three-judge court comprised of appointed judges from the Collective Court. Prior to the appointments, there were 19 judges for single-judge court cases and seven judges in the Collective Court. C.U.

The Secretary for Transport and Public Works, Raimundo Arrais do Rosário has ordered disciplinary procedures to be levelled against the former head of the Meteorological and Geophysical Bureau (SMG), Fong Soi Kun, according to a press release posted yesterday by the Government Spokesperson’s Office. The announcement came about after the release of a CCAC (Comm i s si o n Aga i n st C o r r u p t i o n ) report last Thursday, with the corruption watchdog stating that Fong is to be held responsible for the previous incorrect decisions relating to the hoisting of typhoon signals during Typhoon Nida last year and Typhoon Hato last August. After Typhoon Hato hit, Fong requested to be allowed to step down from the weather body, but while he exited the top position,

he was appointed as a technician at the SMG department due to the rejection of his request for a full demission. The SMG is currently headed by Tam Vai Man, who is also the incumbent director of the Environmental Protection Bureau. Tam was appointed by Secretary Rosário to be the temporary head of the SMG for one year.

Operation overview

Meanwhile, given that the CCAC report also recommended improvements in the internal management of the SMG, yesterday’s statement revealed that the Secretary will also proceed with investigations into the entire operations of the SMG. The statement further indicated that any violation of rules discovered during the investigation would result in immediate disciplinary measures.

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Macau

Tourism

Back on the rise Visitor numbers in September went up 2.4 per cent year-on-year to reach 2.48 million, after the passage of Typhoon Hato in August caused a slight drop Nelson Moura nelson.moura@macaubusinessdaily.com

he total number of visitors to the MSAR reached 2.48 million in the month of September, representing a 2.4 per cent increase yearon-year, according to the latest data released by the Statistics and Census Services (DSEC). The results come after visitation in the month prior was affected by the passage of Typhoon Hato on August 23, with the number of visitors seeing a 0.6 yearly decrease to 2.86 million in that month.

The first nine months of this year saw a cumulative 23.83 million visitor arrivals, an increase of 4.2 per cent year-on-year from the same period last year. Visitor numbers from mainland China reached 1.72 million in August, indicating a 9.2 per cent yearly rise, with the number of visitors from the Mainland going up by 6.3 per cent year-on-year to 16.08 million between January and September. Visitors from mainland China represented 67.5 per cent of the total visitor numbers in the first nine months of this year, followed by Hong Kong with 19.5 per cent and Taiwan with

3.3 per cent. However, the first three quarters of this year saw the second and third largest sources of visitors to Macau Hong Kong and Taiwan - both register year-on-year decreases, with Hong Kong declining by almost 3 per cent, to 4.65 million, and Taiwan by 1 per cent to around 802,200. South Korea registered the largest increase in visitor numbers to the MSAR in the first nine months of this year, with a near-35 per cent year-on-year jump from last year, reaching about 644,100. The number of visitors that chose to stay overnight in Macau during

the first nine months of this year increased by 10.8 per cent year-onyear, to reach 12.63 million, while the number of same-day visitors went down by 2.3 per cent yearly to 11.19 million. Visitor entries by land represented 57.2 per cent of total entries in the first three quarters of the year, having increased 3 per cent year-on-year to 13.64 million. Meanwhile, entries by sea increased by 4.6 per cent yearly to reach 8.19 million between January and September of this year, with entries by air going up 11.4 per cent year-onyear to 1.99 million. advertisement

4 Business Daily Tuesday, October 24 2017

Macau Opinion

Albano Martins*

The problem of positive discrimination There is an issue that is fundamental for me: that whoever participates in the development of our internal economy, as a direct agent, entrepreneur or worker, must have the same treatment in all forums. In fiscal policy, in labour policy - although it is perceived here, and accepted, that priority should be given to local people if they have the same qualifications and experience of those who do not have a local BIR - and in health, to mention perhaps the least controversial areas that should be extended to everyone who works here. In my opinion, the recent decision to increase bus fares is not a novelty in "positive discrimination". Look at the salary tax. The return of 60 per cent of the tax paid up to the limit of MOP12,000 only applies to citizens with a BIR. When there are no citizens with a BIR for local jobs and the DSAL authorizes the importation of non-resident labour, this is done as if it were a punishment against the employer and the worker The employer is obliged to himself. pay MOP200 per month to the FSS for each imported worker, even if they are not covered by or benefit from any social security! Therefore, when the government now speaks of positive discrimination, it is talking about yet another form of positive discrimination. In fact, although DSAL requires, when issuing an import permit for a TNR, that non-resident workers have the same salary as local ones, official statistics clearly prove otherwise. Given, then, that this is the most vulnerable working population, one who needs transport to go to work, without support for housing or health, this is bitter positive discrimination. Much more bitter because it also discriminates against Chinese nationals, who are the majority of immigrant workers! No, this is not the way to solve the problem of buses and traffic. Without these immigrants, it would be difficult for casinos to generate so much money. Discrimination here is various: taxi and bus drivers, croupiers, who can only be local! The savings generated by rising bus prices - which are heavily subsidized by the government, and whose companies have accounts that are not transparent enough for the public to have a correct view of their P&L (profit and loss) accounts - are "minimal" and will weigh on the pockets of all the people most in need, who use buses to move, like bread to the mouth! * an economist and contributor to this newspaper

DSEC

Typhoon upsets restaurant performance in August he proportion of local restaurants and similar establishments that reported a year-on-year growth in receipts in the month of August when Typhoon Hato hit, dropped by 8 percentage points month-on-month, down to 32 per cent. The value is the lowest re-

percentage point increase of businesses in this sector that reported experiencing a decrease in receipts during the month. Meanwhile, 43.8 per cent of respondents of Japanese and Korean restaurants saw increases in revenue, a 19 percentage point increase month-on-month. Of the respondents, 46.2 per cent claimed to have experienced a yearon-year decline in receipts during August, an increase of 11 percentage

corded since November of last year. For local style cafes and congee and noodle shops, 18.4 per cent of respondents indicated they had seen an increase in receipts in August, a fall of 20 percentage points month-on-month. There was a 12.5

points when compared to July. In the wake of the super typhoon and the summer holidays, the interviewed restaurants and similar establishments demonstrated less confidence in their business outlook for September, with just

Cecilia U cecilia.u@macaubusinessdaily.com

21 per cent expressing optimism about the performance, a drop of 11 percentage points. In fact, the proportion of esta blishments anticipating a year-onyear decline in receipts for September increased by 9 percentage points to 48 per cent.

Typhoon also hit retail trade

Similarly, the proportion of retailers who claimed they had seen a yearon-year increase in their business performance in the month of August declined by 8 percentage points, down to 40.8 per cent. For retailers selling motor vehicles, 33 per cent said they had registered increases, while for watches, clocks and jewellery the proportion was 44.4 per cent and for leather goods it was 80 per cent, drops of 33, 28 and 20 percentage points month-on-month, respectively. Meanwhile, 66.7 per cent of supermarkets revealed that sales had increased in August, up 22 percentage points compared to the previous month. On the other hand, 40.5 per cent of interviewed retailers said sales in August had registered a year-on-year decrease, reflecting an increase of 15 percentage points over July. In contrast with more negative expectations from the restaurant sector for September, retailers expect no significant change in September’s sales, according to the DSEC results. The proportion of retailers expecting year-on-year growth in sales for the month increased slightly by 1 percentage point to 25 per cent. The most optimistic sector is that engaged in selling motor vehicles, with 67 per cent of respondents anticipating a year-on-year sales growth in September.

HK-Zhuhai-Macau Bridge

ICBC financing company for super bridge’s border construction The Industrial and Commercial Bank of China (Macau) Limited (ICBC) yesterday announced it would advance financing totalling MOP3.5 billion to China Harbour Engineering Company Ltd. (CHEC) for the construction of the Hong Kong-Zhuhai-Macau Bridge’s Macau Border Area. The financing in question is claimed to be the first attempt at running a financial leasing business in the city. The amount leased will also provide a strong financial guarantee for the construction project. During yesterday’s signing ceremony at MGM Macau, ICBC also inked a strategic cooperation financing agreement with CHEC in order to integrate with the development of the Greater Bay Area project, as well as the Belt and Road initiative.

The authorities responsible for the super bridge announced previously that the construction of the bridge was slated for completion by the end of this year. Inaugurated during the 1980s, CHEC is a subsidiary of China

Communications Construction Co., Ltd which specialises in projects relating to marine engineering, dredging, roads and bridges, rail transportation, aviation hubs and related equipment supply and installation, among others. C.U.

Talent

Resident collects gold medal in professional skills competition A young local resident won a gold medal in the 44th edition of the Professional WorldSkills competition held last week in Abu Dhabi, in the United Arab Emirates, according to information provided by the Government Information Bureau (GCS). The first prize, collected by Fong Hok Kin in the ‘web design and development’ category, is the first-time an award has been won by a representative of the city since it began participating in the competition in

1983, according to the GCS. The MSAR delegation was comprised of 17 young people competing in 15 modalities, according to information available from the Labour Affairs Bureau (DSAL), the official supporter of the MSAR in the competition. Six other participants from the city won awards for excellence in areas such as electronics, floristry, information network and cabling, and IT software solutions for business.

The event gathered some 1,251 participants, and with the exception of four skills categories with an upper age limit of 25, participants were not older than 22 years of age. Contestants came from 58 countries and regions and competed in 51 modalities. Currently, WorldSkills, which claims to be a global hub of skills excellence and development, represents more than 45 skills in over 75 member countries and regions. S.Z..

Business Daily Tuesday, October 24 2017 5

Macau Technology

Out of reach The Alibaba Group assured Business Daily that data and information to be stored in the data centre currently being developed as part of the Smart City project, won’t be accessible by the Mainland government Nelson Moura nelson.moura@macaubusinessdaily.com

he Chinese central government won’t have access to the data stored in the data centre being developed by the Alibaba Group, the group assured Business Daily. “The data stored in the centre will be owned by the Macau government and be under local legislation. Alibaba Cloud is responsible for the technical construction of the smart technology platform, but we do not have access to the data or individual Macau resident information,” a spokesperson from the Chinese technology group told Business Daily. According to the representative, the group will build the “module and the algorithm for the data analysis” but it won’t have access to the information stored and “therefore neither will the Chinese government”. On August 4, the Alibaba Group signed an agreement with local authorities to develop the MSAR into a ‘Smart City’ in two phases by 2021, through the use of cloud data collection technology. After the announcement, representatives from the New Macau Association (ANM) expressed concern that the data stored in the proposed centre would be available at request of the Chinese government, while questioning the lack of a public tender for the plan.

Pointing out trends

for economic trends prediction” and that its positive impact on a variety of different sectors would “surely boost the overall economy of Macau”. The project is being developed by the group’s subsidiary, Alibaba Cloud, with a team having been created es-

The first phase will focus on using cloud computing and data analysis to develop Macau’s cloud computing, smart transportation, smart tourism, smart healthcare and smart city governance, as well as human resources talent. When questioned on how the project would develop the local financial sector, the Alibaba Group told Business Daily that the data centre would provide “Big Data analysis

pecially for the project, based in Hong Kong but travelling frequently to Macau.

The government stated it would allocate MOP200 million annually for the next two years for the project, with the first phase set for completion in June of 2019, and the second phase by June of 2021.

Finding the right place

The data centre construction is said to be in the “very early stages”, with the company still looking for a suitable location for the data centre. Locations being considered for the centre would not “exclusively be MSAR Government properties,” the

company representative stated. The group didn’t provide any information on the possible size of the centre or the number of people employed, saying it was company policy to not disclose this kind of information about its data centres. The group also told Business Daily that currently the project is only being developed in partnership with the MSAR Government, but that due to the dimension of the plan, the group “will look for partnerships with retail, transport, tourism to get the project up and running” in future stages. Workshops and seminars in computing are also currently being provided by the group to government employees and the public. “One part of the project involves better interconnectivity between local government departments to increase efficiency of governance, so we’re also providing training to government employees,” the Alibaba Group spokesperson told Business Daily. When questioned if the Alibaba Group was negotiating for a similar project with the Hong Kong government, the group’s representative stated the company hopes to bring its “expertise and experience in smart city development, talent development, and in promoting technology innovations and entrepreneurship to Hong Kong” in order to “benefit more local entrepreneurs as well as to improve Hong Kong’s city governance and industry upgrading”. advertisement

6 Business Daily Tuesday, October 24 2017

Macau

The 13

All in to get out of the red The 13 Holdings is proposing three avenues to raise ‘urgent’ funds to open its luxury hotel in Cotai by the end of March 2018, with no gaming facilities confirmed yet Sheyla Zandonai sheyla.zandonai@macaubusiness.com

he 13 Holdings Limited has announced it is planning to open its hotel ‘on or before’ March 31, 2018, if it manages to raise nearly HK$2 billion

(US$256.32 million/MOP2.06 billion) through a combination of funds, debt, and loans, according to a filing of the company with the Hong Kong Stock Exchange last Friday. The company stated that the inclusion of gaming operations in the hotel, which it plans to do ‘as soon as

practicable,’ is subject to the progress of the licensed operator submitting an application and obtaining approval for the operation after the license for operating the hotel is granted. Regardless of the status of gaming operations in the property, the company noted it ‘will not affect’ the opening and operation of The 13. Confirming previous filings, the company stated on Friday that postponements regarding the completion of the hotel – originally slated to open by the end of 2016 – were mainly due to delays in obtaining various licences and permits, in addition to more costs for hotel decorations, acquisition of furniture, fixtures, and equipment as well as operating supplies and equipment. The reasons for the delays were also reported as justifying the requirement of ‘further funding’ for completion of the property. Currently, the Hong Kong-listed company states it is exploring three avenues to cope with the costs required to enable the opening of The 13 on or before March 31, after it already obtained a HK$300 million loan in December 2016 as ‘a temporary measure.’ In total, The 13 is seeking to raise nearly HK$1.74 billion through a rights issue offering and the placing of loan shares, having secured a HK$250 million bridge loan to keep up with the new schedule for the opening. According to the filing, the company noted it expects the proceeds from the rights issue ‘will be sufficient for the completion of The 13,’ while the placing ‘will enable the group to service its existing debt’. As for the bridge loan – which is to be repaid from the proceeds of the rights offering – the company claimed it ‘will provide temporary financial relief to the group, enabling [it] to resume the remaining fitting-out works of The 13 Hotel before the completion of the rights issue.’

Rolling the debt

The 13 is proposing to raise gross proceeds amounting to some HK$1.01 billion through a rights issue offering fully underwritten by Get Nice Securities Ltd. The company estimates net proceeds from the rights issue will reach some HK$973 million. Within the rights issue framework, the company is also proposing shareholders approve the capital

reorganization, mainly through a 1 for 10 consolidation of shares and a reduction of the issued capital of the company. In another deal with Opus Capital Limited, the company agreed to place loan notes of an aggregate principal amount of HK$740 million to placee(s) who are not and whose ultimate beneficial owner(s) are not connected persons of the company. The company intends to use the net proceeds from the placing, estimated at HK$717 million, mainly for debt servicing. As for the HK$250 million bridge loan, The 13 noted it entered into an agreement bearing interest at an annual rate of 18 per cent with Get Nice Finance Company Limited, a subsidiary of Get Nice Securities. While stating it ‘is in urgent need of financing,’ the company claims the loan ‘shall provide temporarily financial relief,’ while ‘enabling the group to resume the remaining fitting-out works of The 13 Hotel before the completion of the Rights Issue.’

Gaming room

In the filing, The 13 announced that it had previously entered into a memorandum of understanding (MoU) with an affiliate of one of the holders of ‘a gaming concession or sub-concession’ in Macau in relation to the management and operation of a casino proposed to be opened in the property. The company noted in this regard that ‘no formal agreement has been entered into in respect of the arrangements under the MOU’ as at the date of the announcement, although it claimed further that ‘it did not foresee any difficulties for obtaining approval from the Macau Government on the arrangements as contemplated under the MoU.’ The Gaming Inspection and Co-ordination Bureau (DICJ) confirmed to Business Daily that it has ‘not yet received any one of the gaming concessionaires requesting to open a new casino in The 13 Hotel location.’ As at the date of the announcement, The 13 confirmed that it has not received any negative feedback from the licensed operator in respect of the MoU. The Macau Government Tourism Office (MGTO), in response to Business Daily’s enquiries, said that as of today it had 'yet to receive [The 13's] application for inspection'.

Business Daily Tuesday, October 24 2017 7

Gaming

Casinos

Slowly slowing After a 22 per cent yearly increase in the third quarter of this year, gaming analysts at Bernstein estimate gross gaming revenue growth could ‘decelerate’ to a 12 per cent yearly increase in the last quarter of this year, representing a possible total of almost MOP67.67 billion Nelson Moura sheyla.zandonai@macaubusiness.com

nalysts from brokerage firm Sanford C. Bernstein believe gaming revenues in the last quarter of this year will ‘decelerate’ to a 12 per cent year-on-year rise, or a 1 per cent quarter-to-quarter rise, a note yesterday revealed. The estimates would mean gross gaming revenues in the fourth quarter of this year could reach around MOP67.67 billion (US$8.42 billion). According to the note, this deceleration in the increase of gross gaming revenue is due to ‘more difficult comparisons’ with the respective

previous period of comparison, and to an expected slowing down of the increase in gaming industry earnings before interest, taxation, depreciation and amortization (EBITDA) in the fourth quarter, to an estimated 15 per cent yearly or 4 per cent quarter-to-quarter rise. However, the firm’s estimates for the results for the last three months of this year are still ‘slightly higher’ than previous ones, on account of registered ‘VIP strength’. The group’s analysis of the Gaming Inspection and Coordination Bureau (DICJ) data indicates that, ‘the resilient strength VIP gaming sector has continued to surprise’ with the sector results going up by 35 per cent

year-on-year in the third quarter of this year. Meanwhile, mass market results went up by 11 per cent yearly, the first time ‘VIP growth has outshined mass for the second quarter in a row’ since 2011. Bernstein analysts also estimated gross gaming results would increase by 17 per cent annually in 2017, with the mass market segment going up by 12 per cent and the VIP sector up by 22 per cent.

Seeing the larger picture

The group also pointed out that it expected a considerable decrease in the annual growth of VIP in 2018, to only 1 per cent, with the sector in Macau to reach a compound annual growth

rate of around 6 per cent until 2020. ‘We are cautious on VIP (even though 2018 VIP growth may be higher than we estimate today). Macro-economic slowdown (in particular money supply growth and real estate pricing) is likely to create headwinds for VIP, while the segment remains exposed to policy risks,’ the note stated. Meanwhile, the mass market sector is expected to reach a compound annual growth rate of around 11 per cent until 2020, if hotel room capacity in Macau and local transportation infrastructure is improved. ‘Increasing overnight visitation and higher spend per visitor will be the key drivers of continued mass growth,’ informed the note.

Japan

Gaming mogul Packer retreats from Japan plans

Crown is undergoing a revamp after 19 current and former employees were held for 10 months in China on charges of luring rich Chinese to Australia Tycoon James Packer Monday said plans for gaming empire Crown to expand into the lucrative Japanese market were "off the table" as the company focuses on developing a flagship Sydney casino. The Australian billionaire outlined his interest several years ago in building a resortcasino in Japan to tap the country's love of gambling. But the firm is now pursuing a restructure amid a Chinese gambling crackdown, exiting its holding in Melco Resorts in Macau this year and shelving plans for a Las Vegas casino. Packer said he did not want management "distracted" by participating in any competitive bidding process to build an integrated resort in Japan, should a casino licence become available in Yokohama. "There isn't a great opportunity to get back into Vegas. And there isn't an opportunity to get back into Macau. I don't want

“People talk to me about Japan. I don't believe it is realistic for us to win a licence in Japan” James Packer, largest shareholder and member of the board of Crown Resorts our management to be distracted," he told The Australian newspaper. "People talk to me about Japan. I don't believe it is realistic for us to win a licence in Japan." Asked if that meant a Crown resort in Japan was off the table, Packer replied: "It is off my table. But I am only one director and I haven’t had the conversation with the board. "I am not saying 'no

forever', but what I am saying 'no' to is writing a A$500 million or A$1 billion cheque to go into Japan next week." Japan has long been viewed as the Holy Grail of Asian gaming because of its wealthy population, proximity to China and appetite for other forms of legal gambling, including horse racing and pachinko, a slot machinestyle game. The newspaper said the

international casino industry was still waiting to see a formal bill setting out the main principles under which Japan's casino industry would be run. Crown is undergoing a revamp after 19 current and former employees were held for 10 months in China on charges of luring rich Chinese to Australia. They were released in August. The case hurt Crown's

high roller revenues, with anti-corruption laws in China banning organising gambling activities overseas for wealthy Chinese. The company is now focusing on its casinos in Melbourne and Perth and developing a A$2.4 billion (US$1.9 billion) gaming resort in Sydney which Packer called the "most important building built in Australia for a long time" AFP

8â&#x20AC;&#x201A; â&#x20AC;&#x201A; Business Daily Tuesday, October 24 2017

Greater China Real estate

Home price growth steadies in September as speculative curbs weigh New home prices rose 6.3 per cent year-on-year in September Yawen Chen and Ryan Woo

hina's new home prices registered a second straight month of weak growth in September, with prices in the biggest markets slipping and gains in smaller cities slowing as government measures to cool a long property boom took hold. China's housing market has been on a near two-year tear, giving the economy a major boost but stirring fears of a property bubble even as authorities work to contain risks from a rapid build-up in debt. While monthly price rises peaked in September 2016 at 2.1 per cent nationwide, they have softened only begrudgingly since then, regaining momentum as buyers shrugged off each new wave of measures to curb speculation. Analysts say more tightening could still be expected in lower-tier cities with relatively fast price gains, as critics argue China's ever-growing administrative control over its property market has only reaffirmed speculator views that prices will remain steady. "China's property prices are still rising even as sales are falling off a cliff, which suggests the market still sees property as an investment product in the belief that the government won't let

prices fall," said Yi Xianrong, a Professor of Economics at Qingdao University. Still, signs of a more stable and less frothy housing market for now will be welcome to the country's leaders as they attend a critical Communist Party Congress to set political and economic priorities for the next five years. President Xi Jingping opened the twice-a-decade gathering last week, stressing the need to move from high-speed to high-quality growth. Average new home prices rose 0.2 per cent monthon-month in September, the same rate as in August when prices rose at the slowest rate in seven months, according to Reuters calculations from National Bureau of Statistics (NBS) data out yesterday. "The curbs are in general still intensifying, which have gradually impacted property buyers' expectations," said Zhang Dawei, an analyst with Centaline, a property agency. New home prices rose 6.3 per cent year-on-year in September, decelerating from August's 8.3 per cent increase, partly thanks to last September's high base. Higher prices are also eating up more of home buyers' disposable income, which could dampen future demand. The head of the central bank warned last week that China's household

debt is rising too quickly, and some analysts suspect a recent burst of consumer loans points to the illicit use of loans for property investment. As mega-cities like Beijing imposed increasingly stringent measures, speculators have moved to smaller centres this year where local governments offer cheap credit and impose few restrictions in the hopes of clearing a glut of unsold homes. Prices for new private homes in China's top-tier cities fell 0.2 per cent in September versus a 0.3 per cent decline in August, the NBS said in a note accompanying the data.

In southern boomtown Shenzhen, which borders Hong Kong, prices stabilised after a drop of 0.4 per cent in August. However, some secondand third-tier centres such as the southern town of G u i l i n h av e a l s o b e e n forced to impose curbs in recent months, banning some buyers from quickly "flipping" properties. Tier-3 cities rose 0.2 per cent from a 0.4 per cent increase in August, the NBS said in the note. More curbs are likely to be introduced in lower-tier cities, some analysts say. Ya n Y u e j i n , a n a n alyst with Shanghai-based E-house China R&D

Institute, said smaller provincial capitals with faster gains in recent months such as Guiyang and Shenyang could be tightening controls in the fourth quarter. While market watchers do not anticipate significant price declines let alone a crash, weakness in property and construction is starting to drag on broader economic growth. Data last week showed GDP growth eased to 6.8 per cent last quarter from 6.9 per cent in the first half, with a marked deceleration in the property sector. Property sales dropped for the first time in more than 2 1/2 years in September and housing starts slowed sharply. The majority of the 70 cities surveyed by the NBS still reported a monthly price increase for new homes, although the total dropped to 44 in September from 46 in August. China's housing minister said on Sunday that property sales will slow in the fourth quarter but prices will remain stable. Wang Menghui, head of the housing and urban-rural development ministry, said the government will keep measures consistent and not loosen controls, a pattern that has been seen before in China when prices start to soften more quickly than intended. Reuters

Markets

Tencent unit China Literature launches HK IPO China Literature has a business akin to Amazon.com Inc's Kindle Store Elzio Barreto

China Literature Ltd, China's largest online publishing and e-book company, launched an initial public offering for up to US$1.1 billion yesterday, seeking funds for acquisitions and to expand its digital publishing business. Tencent Holdings Ltd controls China Literature with a 62 per cent stake. Private equity firm Carlyle Group LP owns 12.2 per cent while Trustbridge Partners, a private equity firm founded by Shujun Li, the former CFO of

Shanda Interactive, holds 6 per cent. According to a term sheet for the IPO seen by Reuters, China Literature and some of its shareholders are offering 151.37 million shares in an indicative range of HK$48 to HK$55 each. The new shares will be equivalent to 16.7 per cent of China Literature's enlarged share capital, with its market capitalization expected to be up to US$6.4 billion. Tencent and China Literature did not immediately reply to a Reuters request for

comment on the IPO terms. The China Literature IPO is the latest in a series of high-profile technology listings in Hong Kong. Last month, ZhongAn Online Property & Casualty Insurance Co's hit the market with a US$1.5 billion IPO. And in coming days, Razer Inc, a gaming hardware maker backed by Intel Corp and Hong Kong billionaire Li Ka-shing, is set to launch an IPO for up to US$600 million. China Literature has a business akin to Amazon.

com Inc's Kindle Store, operating a platform with 9.6 million literary works from 6.4 million authors. Bank of America Merrill Lynch, Credit Suisse and

Morgan Stanley were hired as sponsors for the IPO, with China International Capital Corp Ltd (CICC) and JPMorgan also working as joint global coordinators. Reuters

Business Daily Tuesday, October 24 2017 9

Greater China In Brief Trade

Fuel exports sink as refiners run out of quotas

Minister

Beijing aims to meet air quality standards by 2035 China's average PM2.5 rate stood at 42 micrograms per cubic metre in the first eight months of 2017 Muyu Xu and Meng Meng

hina will strive to comply fully with its own air quality standards by 2035, the country's environment minister said yesterday, adding that the long and difficult battle against pollution would eventually benefit the economy. Speaking on the side-lines of China's Communist Party Congress, Minister of Environmental Protection Li Ganjie urged the public to be "patient" when it came to improving air quality, and said a strengthened environmental protection system would eventually benefit the country's economic development. China has been cracking down on big industrial polluters in order to reverse the damage done to its skies, rivers and soil by more than three decades of breakneck growth. Beijing will impose tough production curbs this winter to cut hazardous airborne particles known as PM2.5 by at least 15 per cent in 28 smog-prone northern cities, to help

ensure the nations meets a series of politically crucial 2017 targets. "We are fully aware of the problems we are facing," Li told reporters. "Coal accounts for a high proportion of the overall energy mix," he said. Also, "we have too many commodities transported by trucks.

‘Gross merchandise value of ecommerce in Southeast Asia will balloon to US$65.5 billion by 2021’ Some companies avoid emission control measures. Some local governments are not enforcing measures from the central government," Li said. China's capital Beijing is under pressure to bring average PM2.5

readings to 60 micrograms per cubic metre this year, down from 73 micrograms last year. The figure remains significantly higher, however, than even the country's own official air quality standard. The World Health Organization recommends concentrations of no more than 10 micrograms, while China itself should aim to meet its own "interim" standard of 35 micrograms by 2035, Li said. "We understand that current air quality fails to meet people's expectations," he said. "People should be patient about improvements in air quality improvement as it will take time to solve such a big problem." China's average PM2.5 rate stood at 42 micrograms per cubic metre in the first eight months of 2017, down 2.3 per cent from the same period last year. The average reading in the smogprone Beijing-Tianjin-Hebei region, however, stood at 65 micrograms over the period, up 10.2 per cent from a year earlier. Reuters

Strategy

Noble Group to sell oil liquids unit to Vitol Once Asia's biggest commodities trading house, Noble is slashing jobs and selling assets to reduce its debt and win support from its lenders after a crisis-wracked two years taking advantage of profitable trading opportunities," the company said.

Anshuman Daga

Struggling commodities trader Noble Group agreed to sell its Americas-focused oil liquids business to Vitol for about US$580 million as part of a debt-cutting strategy, and warned of a big loss for its third quarter. Yesterday's move came after Reuters reported late on Friday that Vitol, the world's largest oil trader, was nearing a deal to buy Singapore-listed Noble's oil liquids unit. In July it agreed to sell its smaller gas and power business to Mercuria as it focuses on its core Asian coal trading and LNG businesses. Annisa Lee, Nomura's head of Asia ex-Japan's flow credit analysis, said the asset sale was expected and the "longer-term concern" was the ongoing operating losses. "I guess the question is when are they going to basically turn around their business, which is quite key. If they can actually provide more details, what sort of assets they can still sell, that would be great," she said. Hong Kong-based Noble was plunged into crisis in February 2015 when Iceberg Research questioned its accounts, and then the company was hit by a commodities downturn. While Noble has stood by its accounts,

Negotiations with lenders

the upheaval triggered a share price collapse, credit downgrades, a series of writedowns, as well as fund raising and management changes. Noble's market value has plummeted to less than US$400 million from US$6 billion in February 2015. Noble warned of a total net loss of US$1.1 billion to US$1.25 billion in the three months ending September, citing non-cash losses and underlying trading results. This follows a US$1.75 billion net loss reported in April-June. In July, it announced an up-to-US$1 billion disposal plan for assets outside North America over the next two years as Chairman Paul Brough, a restructuring specialist appointed in May, sought to tackle Noble's more than US$3 billion of debt. "Conservative liquidity management and constraints placed on the group's access to trade finance lines led to disruption costs and prevented the group from

Noble has been locked in negotiations with its core lenders to support a US$2 billion credit facility, secured on its inventories and working capital. "Whilst no assurance can be given as to the outcome of these discussions, the group believes that these are open and constructive, and are moving forward," it said. Noble said the gross proceeds from the proposed sale of its oil liquids business would be US$1.4 billion, and after deducting indebtedness of about US$836 million, the cash proceeds would be about US$580 million. In August, ratings agencies S&P and Moody's cut their credit ratings on Noble, citing high default risks. Noble is a big player in the global physical oil market, trading crude and refined products. But its operations shrank this year due to higher prices and liquidity constraints. The company has blending and wholesale capabilities in North America and the Caribbean, alongside long-term storage leases globally. A purchase of Noble's oil liquids business will reinforce Vitol's position as a leading oil trader. Reuters

China's gasoline exports in September fell to their lowest monthly level in almost two years, with diesel shipments dropping to the lowest since January, as domestic demand picked up ahead of winter and refiners ran out of quotas. Gasoline exports fell by 32.4 per cent from a year ago to 570,000 tonnes, the lowest since November 2015, according to data released by the General Administration of Customs yesterday. Outbound diesel shipments in September were down 26.1 per cent from a year ago at 1.18 million tonnes. Auto industry

Tesla reaffirms effort to build cars in Mainland Electric car maker Tesla Inc reaffirmed on Sunday it is talking with the Shanghai municipal government to set up a factory in the region and expects to agree on a plan by the end of the year, but declined to comment on a report that a deal has been reached. China levies a 25 per cent duty on sales of imported vehicles and has not allowed foreign automakers to establish wholly owned factories in the country, the world's largest auto market. Those are problems for Tesla, which wants to expand its presence in China's growing electric vehicle market without compromising its independence or intellectual property. Consumption

Philips growth spurred by toothbrush demand in Mainland Strong demand for its electric toothbrushes in China helped Dutch healthcare technology company Philips to a 4 per cent rise in sales in the third quarter, on track to hit its full-year target, the company said yesterday. Philips, which spun off its lighting division last year to focus on medical devices and healthcare products, recorded double-digit growth in China, which made up for flat sales in North America and a 6 per cent decline in Western Europe. "We had a particularly strong quarter in China", Chief Executive Frans van Houten said. Commodities

Sugar imports slide by two-thirds as tariffs bite China's sugar imports in September fell two-thirds from a year earlier as hefty tariffs on foreign arrivals continued to dent buying appetite, customs data showed yesterday, while corn imports surged to meet temporary tightness in supply. Last month's sugar imports slumped 67.5 per cent to 160,000 tonnes, data from the General Administration of Customs showed. Imports in the first nine months of the year fell 29.8 per cent from a year earlier to 1.83 million tonnes. Beijing has slashed permits for outof-quota sugar imports to around 1 million tonnes, almost half of last year's allowance.

10 Business Daily Tuesday, October 24 2017

Greater China

Green push

Mainland's recyclers eye looming electric vehicle battery mountain Industry has yet to agree on the standardisation necessary to handle spent batteries more profitably and in big numbers David Stanway

fter years of dismantling discarded televisions and laptops, a Shanghai recycling plant is readying itself for a new wave of waste: piles of exhausted batteries from the surge of electric vehicles hitting China's streets. The plant has secured licences and is undergoing upgrades to handle a fast-growing mountain of battery waste, said Li Yingzhe, a manager at the facility, run by the state-owned Shanghai Jinqiao Group. "We believe there will be so much growth in the number of electric vehicles in the future," he said. Shanghai Jinqiao will be entering a market that includes Chinese companies like Jiangxi Ganfeng Lithium and GEM Co. Ltd, whose share prices have risen as they invest in battery recycling facilities of their own. That confidence comes even as companies face considerable hurdles launching battery recycling businesses, including high operating costs. The growth of China's electric vehicle industry - and the ambitions of recycling companies - is underpinned by a government drive to eventually phase out gasoline-burning cars, part of a broader effort to improve urban air quality and ease a reliance on overseas oil. Led by companies like BYD and Geely, sales of electric vehicles in China reached 507,000 in 2016, up 53 per cent over the previous year. The government is targeting sales of 2 million a year by 2020 and 7 million five years later, amounting to a fifth of total car production by 2025. According to the International Energy Agency, China accounted for more than 40 per cent of global electric car sales in 2016, followed by the European Union and the United States. It also overtook the United States as the market with the greatest number of electric vehicles. Production in China of the lithium batteries that power those cars has

also soared. In the first eight months of 2017, Chinese manufacturers produced 6.7 billion batteries, up 51 per cent from the year-earlier period, according to industry ministry data. All that activity could put China in pole position for dominating the global electric car industry, as well as related businesses like batteries and recycling. China began promoting electric vehicles in 2009, and as the first of those cars reach the end of their lifespan, lithium battery waste could be as much as 170,000 tonnes next year, industry experts estimate. The figure is likely to keep multiplying in tandem with car sales. Dealing with all that waste poses huge problems for China. Lithium batteries are not yet classified as hazardous waste and are therefore not subject to stringent disposal controls. Battery waste includes heavy metals like cobalt and nickel, as well as toxic residues that could end up in waterways and the soil if not handled properly. Despite the challenges, battery waste also represents a significant opportunity for the country's growing recycling industry. The China Automobile Innovation Centre, an industry think tank, estimates the recycling market could be worth RMB31 billion (US$4.68 billion) by 2023. Wang Chuanfu, president of BYD Co Ltd, China's leading electric carmaker, last month described the lithium, copper and cobalt extracted from spent batteries as "treasures". Larger companies with high-tech recycling operations are already reaping the benefits, including Jiangxi Ganfeng Lithium , Sinolink Securities, a local brokerage, said in a note to investors. The company's share price has surged more than 200 per cent this year. Sinolink also cited GEM , a self-proclaimed "urban miner" that runs China's largest automated battery dismantling facility in Shenzhen. GEM's shares have risen more than 60 per cent since January.

Recycling challenges

Still, the industry faces numerous obstacles. Recycling lithium batteries can be prohibitively expensive for many companies. And the industry has yet to agree on the standardisation necessary to handle spent batteries more profitably and in big numbers. Some executives also say China is not doing enough to encourage the industry with subsidies and enforce existing environmental regulations. "Speeding up the recycling of lith-

‘In the first eight months of 2017, Chinese manufacturers produced 6.7 billion batteries, up 51 per cent from the yearearlier period’ ium batteries is a matter of urgency, and has become a major issue for the development of the new energy vehicle industry," Zhang Tianren, chairman of the battery maker Tianneng Power, wrote in a proposal submitted to China's parliament in March. The commercial viability of the sector has been undermined by soaring waste treatment costs, as well as high taxes, Tianwei's Zhang said. In his paper, Zhang cited one recycling company as saying that the value of materials extracted from one tonne of lithium-iron-phosphate battery waste stood at RMB8,110, but the cost of recycling them would be RMB8,540. Automating the recycling process in China was another major challenge due to a lack of standardised product designs, said Zhang. Automation was also being held back by poor equipment and technology, especially among smaller producers, Xiao Hai, chief engineer

with the Shenzhen-based Clou Electronics, a company that develops new energy products, said at an energy conference in August. The government, meanwhile, is trying to transform the country's recycling system into a high-tech regulated industry. Large-scale battery makers are being pressed to establish their own recycling facilities, and polluting backyard recyclers have been forced to close. China's industry ministry last year urged the sector to introduce standardised designs and raise technology to "international" levels by 2020. It plans to publish comprehensive new battery recycling rules before the end of the year. But Tianneng's Zhang said regulators were not enforcing policies and penalising unqualified companies. "Because policies are not enforced and there is no clear incentive mechanism, lithium battery recycling is not profitable," he said. China's Ministry of Industry and Information Technology, which regulates electric cars, did not respond to faxed requests for comment. The Ministry of Environmental Protection also did not respond. Battery companies have for the moment been bearing much of the cost of recycling. While carmakers are technically liable for recycling batteries, in practice they sign deals with suppliers to recycle batteries on their behalf. Green Cheng, chief executive of Shenzhen Cham Battery Technology Co. Ltd, said that recycling was a strain on the resources of battery makers. Shenzhen Cham churns out 300,000 lithium batteries a day at its factory in Dongguan, in southern China, and lists Geely, the automaker, among its partners. The company has to pay a recycling company to dispose of batteries. "If manufacturers like us are going to be responsible, then the government definitely needs to provide funds to support us," he said. Reuters

Business Daily Tuesday, October 24 2017 11

Asia Politics

Japan's Abe to push pacifist constitution reform after strong election win Prime Minister Shinzo Abe, buoyed by a huge election win for lawmakers who favour revising Japan's post-war, pacifist constitution, is likely to push towards his long-held goal but will need to convince a divided public to succeed Linda Sieg

arties in favour of amending the U.S.-drafted charter won nearly 80 per cent of the seats in Sunday's lower house election, media counts showed. That left the small, new Constitutional Democratic Party of Japan (CDPJ) as the biggest group opposed to Abe's proposed changes. Formed by liberal members of the Democratic Party, which no longer exists in the lower house, it won 54 seats, a fraction of the ruling bloc's two-thirds majority in the 465-member chamber. Abe said he wanted to get other parties, including Tokyo Governor Yuriko Koike's new conservative Party of Hope, on board and was not insisting on a target of changing the constitution by 2020 that he floated earlier this year. "First, I want to deepen debate and have as many people as possible agree," he told a Japanese broadcaster late on Sunday. "We should put priority on that." Amending the charter's pacifist Article 9 would be hugely symbolic for Japan. Supporters see it as the foundation of post-war democracy but many conservatives view it as a humiliating imposition after Japan's defeat in 1945. It would also be a victory for Abe, whose conservative agenda of restoring traditional values, stressing obligations to the state over individual rights and loosening constraints on the military, centres on revising the constitution. "Mr. Abe is trying to create a legacy. His first legacy project was to get the economy out of deflation," said Jesper Koll, head of equities fund WisdomTree Japan.

Japanese Prime Minister Shinzo Abe puts a red rose on name of a party's candidate to be elected in the Lower House election at headquarters of the ruling Liberal Democratic Party (LDP) in Tokyo, Japan, 22 October 2017. Source: Lusa

"The second legacy is to change the constitution," he said. "You can debate whether he has a mandate but what will make or break him ... is the constitutional issue." Any revision of the constitution requires support from two-thirds of the members of each chamber of parliament and a majority in a public referendum, with no minimum quorum.

Public divided

"I think that debate in parliament will begin," said Zentaro Kamei, a senior researcher at think tank PHP Institute and a former lawmaker in Abe's Liberal Democratic Party (LDP). "But the reason given for this snap election was Abe's proposal to change what sales tax hike revenues would be used for. If he starts talking about the constitution, people will say, 'you didn't ask me that'," Zentaro said. Abe proposed last May adding a

clause to Article 9 to legitimise Japan's Self-Defence Force. Read literally, Article 9 bans a standing military but has been interpreted to allow armed

“You can debate whether he has a mandate but what will make or break him ... is the constitutional issue.” Jesper Koll, head of equities fund WisdomTree Japan forces exclusively for self defence. Parliament enacted laws in 2015 allowing Japan to exercise collective self-defence, or aid allies under

attack, based on a reinterpretation of the constitution rather than a formal revision. Critics, including CDPJ leader Yukio Edano, say those laws violate the constitution. The LDP's junior partner, the Komeito, is cautious about revising Article 9, perhaps even more so after signs that some of its dovish supporters had voted for the CDPJ. It also believes that the biggest opposition party should agree with the proposed changes. Opinion polls show the public is divided on Abe's proposal. An NHK survey before the election showed 32 per cent in favour, 21 per cent opposed, and 39 per cent unsure. Media exit polls showed that, despite the LDP's big win, 51 per cent of voters don't trust the prime minister, a hangover from suspected cronyism scandals that eroded his support earlier this year and a potential risk if a referendum is held. Reuters

Immigration

Australia to spend up to US$195 million housing refugees after PNG detention centre closes Australia will spend up to A$250 million (US$195 million) housing nearly 800 refugees and asylum seekers in Papua New Guinea for the next 12 months after its controversial detention centre closes this month Colin Packham

However, hundreds of detainees are refusing the leave the Australian-run and funded Manus Island detention centre, which will close on Oct. 31, fearing for their safety in the general community on Manus Island off Papua New Guinea's north coast. Behrouz Boochani, a Kurdish-Iranian journalist held on Manus Island for four years, said detainees fear being assaulted if they moved to the new, Australian-funded Lorengau Refugee Transit Centre. "Refugees either move to Lorengau where they risk being attacked by angry local people, or be taken over by PNG defence forces who have already seriously threatened their safety," Boochani told Reuters. Australia refuses to allow asylum seekers arriving by boat to reach its shores, instead detaining them in offshore centres on Manus and the South Pacific island nation of Nauru. The United Nations and rights groups

‘The United Nations and rights groups have for years cited human rights abuses among detainees in the centres’ have for years cited human rights abuses among detainees in the centres. The Papua New Guinea Supreme Court ruled in 2016 that the Manus centre was illegal and the government in the capital Port Moresby ordered its closure. Australia had hoped the detainees would be either resettled into Papua New Guinea society or the United States, under a controversial refugee swap, by the time the centre closed. So far, only 54 refugees have moved to the United States.

Deputy commissioner of Australian Border Force Mandy Newton said yesterday that Australia would fund the operation of three new transit centres on Manus for detainees. "Refugees will be provided funding to purchase their own food and other personal items, security will be provided at three facilities and health care will be provided at the East Lorengau Refugee Transit Centre," Newton told a Senate hearing in Canberra.

"I estimate it will cost between A$150-A$250 million." The United Nations last week warned of a "humanitarian crisis" amid fears Australia would walk away completely from any involvement with refugees on the tiny Pacific Island. Refugee advocates said the new funding will not end a stand-off between asylum seekers and Australia, which they fear threatens to escalate into violence. Reuters

12 Business Daily Tuesday, October 24 2017

Asia SE Asia

Consumer goods firms harness online data to tap e-commerce boom Lazada and Zalora are among the few e-commerce platforms that operate in multiple Southeast Asian countries. But the region is becoming a new battleground as Amazon and JD.com make beachheads in Singapore and Thailand Aradhana Aravindan and Chayut Setboonsarng

cosmetics firm Shiseido, say

to set up a physical presence.

Babbar, e-commerce director

the e-commerce boom allows them to push deeper into markets that can otherwise be difficult to understand and tough to penetrate due to poor retail networks and infrastructure. "Data from Lazada has been used to position certain products where consumer preferences are different. For example, Thai customers like to buy diapers in special cartons, while Malaysians prefer multiple packs," says Chan. To reach more customers and get a better handle on their online behaviour, consumer goods companies are forging partnerships with e-commerce firms like Lazada and fashion website Zalora.

"This data is very powerful and very insightful, if used properly," Mehra added. Unilever, whose products range from Hellmann's mayonnaise to Dove soap, said it is seeing more demand from

at Unilever Southeast Asia and Australasia. The conglomerate, which works with the likes of Singapore online grocer RedMart, Indonesia's Blibli and Vietnam's Tiki, said it introduced its St Ives skincare brand on Lazada after seeing a trend towards natural products and shopper search data.

hen diaper maker DSG International (Thailand) wants to know what its customers are thinking, it often turns to Lazada, an e-commerce firm majority-owned by Alibaba Group Holding. "From (their) data, we know mothers sometimes browse at night, so we can offer flash sales when we know customers are browsing," says Ambrose Chan, the Thai company's CEO. Southeast Asia is the world's fastest-growing internet market, home to 600 million consumers from Vietnam to Indonesia via Singapore, many of them tech- and social media-savvy. They are rapidly spending more time and money online. A Nielsen study in 2015 estimated Southeast Asia's middle-class will hit 400 million by 2020, doubling from 2012. Gross merchandise value of ecommerce in Southeast Asia will balloon to US$65.5 billion by 2021, from US$14.3 billion last year, predicts consultancy Frost & Sullivan. Research firm Euromonitor forecasts Internet retailing in Indonesia, for example, will more than double to US$6.2 billion by 2021, and Thailand will increase 85 per cent to US$2.8 billion. Consumer goods firms, such as Unilever and Japanese

Powerful, insightful

A customer who clicked on a 50 millilitre product may instead buy a smaller 30 ml product, said Pranay Mehra, vice president, digital and e-commerce at Shiseido Asia Pacific, noting that data and online selling experience can help firms bundle offers, decide on packaging and distribution, and influence where

‘Gross merchandise value of ecommerce in Southeast Asia will balloon to US$65.5 billion by 2021’ rural consumers in developing markets like Indonesia and Vietnam. "With all our e-commerce partners, we're using data to help us find innovative solutions to unlock key barriers of high cost delivery and poor credit card penetration in remote areas," said Anusha

Data and logistics

"Traditional retailers will struggle to see customer behaviour," said Lazada Thailand's CEO, Alessandro Piscini. "We can tell if a customer is pregnant from their search behaviour." Lazada, he said, plans to use data science to help its merchants customize offers for specific customer groups based on age, gender and other preferences. Zalora, which sells clothing and accessories online in markets including Singapore, Malaysia and Indonesia, said it was working on ad-hoc projects with some brands to help them understand their customers based on data.

Lazada and Zalora are among the few e-commerce platforms that operate in multiple Southeast Asian countries. But the region is becoming a new battleground as Amazon and JD.com make beachheads in Singapore and Thailand. Lazada Thailand will focus on partnering with fast-moving consumer goods companies to maintain its lead, Piscini said, and is expanding its logistics footprint across a region that has poor roads, clogged cities and thousands of often remote islands. To be sure, online still contributes a tiny portion to consumer goods companies' sales, but some local firms are going beyond partnerships and investing in their own e-commerce capabilities. Thailand's top consumer goods manufacturer Saha Group has seen online sales of some of its brands rise tenfold since it began a partnership with Lazada in June, but online still represents just 1-2 per cent of total sales. Saha is using e-commerce data to customize offerings. "We now make real-time offerings to customers. Before, promotions would be seasonal," Chairman Boonsithi Chokwatana told Reuters. The company, whose products include instant noodles, toothpaste and laundry detergent, is investing 2 billion baht (US$60 million) in logistics to support its e-commerce ambitions, including a 21-storey warehouse and a big data team, he said. Reuters

Security

Philippines declares siege by Islamist rebels over in Marawi City The Philippines declared an end yesterday to five months of fierce urban warfare in a southern city held by pro-Islamic State militants, a battle that has marked the country's biggest security crisis in years Manuel Mogato

Defence Secretary Delfin Lorenzana said combat operations had been terminated, after troops prevailed in the last stand against gunmen who clung on inside several buildings in the heart of Marawi. "There are no more militants in Marawi," he told reporters in Clark on the sidelines of a meeting of regional defence ministers. Reuters journalists in Marawi City heard automatic gunfire and artillery throughout yesterday morning. Military spokesman, Major General Restituto Padilla, confirmed there was

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still gunfire in the city, but there were "no more terrorists" in Marawi. He did not elaborate. Padilla said the troops tried to convince the remaining rebels to surrender, but they refused. Two wives of fighters were among those killed. The siege has stunned the Philippines and stoked wider concerns that Islamic State loyalists have ambitions to make the Muslim areas of the island of Mindanao a base for operations in Southeast Asia. Those fears are compounded by the rebels' ability to recruit young fighters, stockpile huge amounts of arms and endure 154 days of ground offensive and

Filipino Defense secretary Delfin Lorenzana (L) together with Armed Forces Chief Geneneral Eduardo Ano (R) announce that government troops have captured location where pro-so-called Islamic State group militants made their final stand in Marawi city yesterday. Source: Lusa

government air strikes that have devastated the city. The military has made significant gains in retaking Marawi in the week since Isnilon Hapilon, Islamic State's "emir" in Southeast Asia and Omarkhayam Maute, a leader of the Maute militant group, were killed in a night-time operation. Another leader and possible bankroller of the operation, Malaysian Mahmud Ahmad, was likely killed also, the military said. Lorenzana said there would be other military operations and six battalions of troops would remain in Marawi. He did not elaborate on those operations. Reuters

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Business Daily Tuesday, October 24 2017â&#x20AC;&#x201A; â&#x20AC;&#x201A; 13

Asia In Brief

Inflation

S.Korea producer prices fastest in 5 months

Rate rigging

ANZ in last-minute settlement with regulator

South Korea's producer price index (PPI) rose in September at the fastest annual pace in five months while rising for an 11th consecutive month, central bank data showed yesterday. The index rose 3.6 per cent in September on annual basis, the Bank of Korea said, edging up from August's 3.3 per cent increase. The sub-index showed that producer prices rose on annual basis for all sectors, except for agricultural goods. Prices of industrial goods, which have the heaviest weighting in the index, rose 4.9 per cent as petroleum goods' prices jumped 21.1 per cent boosted by higher global oil prices. Korean crisis

Abe, Trump agree to raise pressure on North Korea

The bank said the financial impact would be reflected in annual earnings due later this week Paulina Duran

Australia and New Zealand Banking Group Ltd has reached a last-minute agreement to settle a case brought by the country's securities regulator accusing it of manipulating the bank bill swap rate. Australia's third-largest lender, which had previously said it would defend itself against the allegations, did not give a reason for its decision to settle or disclose financial terms. It said it would make a more detailed statement in two days time after more progress had been made on the agreement. The deal could open ANZ to possible class action lawsuits from shareholders and also throws the spotlight on Westpac Banking Corporation and National Australia Bank which are facing similar allegations that they rigged a benchmark rate used to price financial products. "Any settlement was likely premised on them admitting that they've done the wrong thing, which does open the way up for class actions," said CLSA banking analyst Brian Johnson, although he added that the settlement

sum with ASIC was likely to be immaterial in size. The court hearings had been due to start on Monday but have now been adjourned until Wednesday at the request of the Australian Securities and Investments Commission (ASIC).

Key Points ANZ to settle long-running raterigging case with regulator Settlement may expose bank to potential class action suits Westpac, NAB also accused of rate-rigging Court hearing adjourned till Wednesday Westpac said it had no immediate comment yesterday. A representative for NAB was not immediately available for comment. They have previously said they would defend themselves in court. ASIC's allegations that the three lenders were involved in rigging the bank bill swap reference rate (BBSW)

is only one of several scandals engulfing Australia's banking sector in which lenders have also been accused of widespread abuses at their financial advice and insurance units. Commonwealth Bank of Australia, the nation's No. 1 lender, is not part of ASIC's lawsuit. But it has been taken to court by anti-money-laundering agency AUSTRAC which has accused it of more 50,000 breaches of anti-money laundering rules. ASIC has also launched its own investigation into the matter. CBA has not disputed that it processed tens of thousands of illicit transfers but argues the breaches were largely caused by a software glitch and contests its level of responsibility. Australia's four major lenders control 80 per cent of the country's lending market and have posted record profits for years. The BBSW is the primary interest rate benchmark used in Australian financial markets to price home loans, credit cards and other financial products. The method used to calculate the BBSW was changed in 2013. Reuters

Japan

Central bank warns of structural woes hurting private banks' profits Japanese banks lag behind their global counterparts in boosting profitability as they compete for dwindling lending opportunities in a shrinking market, the country's central bank said yesterday Leika Kihara

Prolonged ultra-loose monetary policy has squeezed margins of financial institutions in many advanced economies including Japan, where its central bank caps borrowing costs at zero per cent through aggressive money printing to reflate growth. But structural factors are also behind declining profits at Japanese banks which, if left unaddressed, could destabilise the banking system, the Bank of Japan (BOJ) said. "Financial institutions in advanced economies with low interest rates are all facing falling profitability. But global comparisons show profitability is particularly low in Japan," the central bank said in a semi-annual report analysing the banking system. "Japanese banks may be saddled with an excess of employees and outlets, which is intensifying competition within the industry and hurting profitability," it said. Many regional banks lack major sources of revenue beyond lending,

Japanese Prime Minister Shinzo Abe and U.S. President Donald Trump agreed to work together to raise pressure on North Korea, Yasutoshi Nishimura, a deputy chief cabinet secretary, said yesterday. Abe and Trump spoke by telephone after the Japanese premier's ruling coalition scored a big win in an election on Sunday. Nishimura told reporters that Abe and Trump were planning to play golf together on Nov. 5, when Trump makes his first visit to Japan. Diplomacy

Indonesia asks why U.S. blocked military chief's travel Indonesia yesterday said it had made "urgent" requests for an explanation why the United States barred its military chief from travelling to the U.S., as anger simmered in the world's largest Muslimmajority country over the diplomatic incident. Armed forces commander General Gatot Nurmantyo was stopped on Saturday from boarding an Emirates flight to the U.S., despite having a visa and an official invitation to attend a conference from his counterpart, the chairman of the U.S joint chiefs of staff, General Joseph F. Dunford Jr. Foreign minister Retno Marsudi said she had accepted an official apology from the deputy U.S. ambassador in Jakarta, but still awaited a detailed explanation. Earnings

Kobe Steel considering withdrawing its full year forecast

as they struggle to charge transaction and advisory fees to customers unaccustomed to paying money for such services, the report said. Financial services fees make up just 0.01 percentage point of Japan's consumer price index, far less than 0.23 of a percentage point in the United States and 1.20 of a percentage point in Britain, the report showed. Faced with low inflation and tepid economic growth, many central banks like the BOJ, the Federal Reserve and the European Central Bank, have adopted unconventional monetary easing steps since the global financial crisis in 2008.

While the measures were necessary to revive growth, the resulting plunge in interest rates has hurt profits at financial institutions by narrowing their margins. The problem is more acute in Japan, where just over 100 regional banks compete in an overcrowded market that is shrinking amid a rapidly ageing population. BOJ Governor Haruhiko Kuroda offered a rare warning in February that low profitability at financial institutions could sow the seeds of a new financial crisis, adding that mergers and consolidation may be among future options. Reuters

Kobe Steel Ltd is considering withdrawing its earnings forecast for this fiscal year as it struggles to quantify the impact of its data falsification scandal, Kyodo reported yesterday. Japan's No. 3 steelmaker has forecast a profit for the year through March 2018 after two successive annual losses, but the outlook has been clouded by the potential fallout from the falsification scandal that has sent shockwaves along global supply chains. On Friday the company admitted that it has lost some customers to competitors as it revealed widespread data falsification has extended to its mainstream steel sheet business.

14 Business Daily Tuesday, October 24 2017

International In Brief

Portugal

Eurostat confirms budget deficit at 2 per cent Portugal's budget deficit stood at 2 per cent of Gross Domestic Product (GDP) in 2016, Eurostat said yesterday confirming previous figures, while public debt remains the third largest in the European Union (EU). In the second notification for 2016 of the Member States' deficits and public debts, Eurostat confirmed that Portugal's deficit last year was 2 per cent of GDP, down from 4.4 per cent in 2015. Meanwhile, Portuguese public debt grew from 128.0 per cent in 2015 to 130.1 per cent in 2016. In the euro zone, the public deficit to GDP ratio fell from 2.1 per cent in 2015 to 1.5 per cent in 2016 and in the European Union as a whole from 2.4 per cent to 1.7 per cent. Gulf crisis

Tillerson says Saudi Arabia not ready for talks with Qatar Saudi Arabia is not yet ready to begin direct talks with Doha to resolve the nearly five-month diplomatic and trade cutoff affecting Qatar, U.S. Secretary of State Rex Tillerson said on Sunday. "There is not a strong indication that the parties are ready to talk yet," Tillerson said of discussions he had earlier in the day in Riyadh with Saudi Crown Prince Mohammed bin Salman aimed at overcoming the row. Derivatives

UK watchdog fines Merrill Lynch for reporting failure Britain's financial watchdog has fined Bank of America's Merrill Lynch investment banking arm 34.5 million pounds (US$45.5 million) for its third transaction reporting failure in just over a decade. The Financial Conduct Authority said the bank failed to have adequate oversight arrangements, undertake testing or allocate enough staff to properly meet reporting obligations for derivatives trading between February 2014 and February 2016. The bank agreed to settle at an early stage in the investigation and received a 30 per cent cut in the overall fine of 49.32 million pounds, the FCA said in a statement yesterday. WHO

Environment

Twelve big cities to buy zero emissions buses, extend green areas Zero emissions areas could mean more parks, pedestrian areas or roads where only electric or hydrogen-powered vehicles could enter Alister Doyle

welve major cities including London, Paris, Los Angeles and Cape Town promised yesterday to buy only zero-emissions buses from 2025 and to make major areas free of fossil fuel emissions by 2030 to protect the environment. The 12, with a combined population of almost 80 million, said they would promote walking, cycling and the use of public transport under a joint "fossil-fuel-free streets declaration". Many cities are setting tougher environmental goals than governments to limit air pollution and to achieve the goals of the 2015 Paris climate agreement to curb greenhouse gas emissions. "Air pollution caused by petrol and diesel vehicles is killing millions of people in cities around the world," Paris Mayor Anne Hidalgo said in a statement. "The same emissions are also causing climate change." The mayors, part of the C40 group of cities which is seeking to slow global warming, said they would "procure only zero-emissions buses from 2025

and ensure that major areas of their city are zero emissions by 2030." Other cities signing up were Copenhagen, Barcelona, Quito, Vancouver, Mexico City, Milan, Seattle and Auckland.

“Air pollution caused by petrol and diesel vehicles is killing millions of people in cities around the world... The same emissions are also causing climate change.” Anne Hidalgo, Paris Mayor

Zero emissions areas could mean more parks, pedestrian areas or roads where only electric or

hydrogen-powered vehicles could enter to make cities more attractive places to live. They did not define how big "major areas" would be. Barcelona Mayor Ada Colau, for instance, said the city was aiming to add 165 hectares of green space in coming years, extend bike lanes and cut the number of trips by private vehicles by a fifth. Seattle Mayor Tim Burgess said the plan demonstrated "the power of cities to lead on climate." C40 estimated that there were 59,000 buses of all types operating on the streets of the 12 cities. Among them, London says it has the largest electric bus fleet in Europe, with more than 2,500 hybrid electric buses made by China's BYD and Britain's Alexander Dennis. In an expanding market, other makers include Volvo, MercedesBenz Daimler and Proterra Inc. Caroline Watson, an expert in low-emission vehicles at C40, told Reuters the declaration was meant as "a clear commitment in writing to raise the bar and give a signal to the private sector" to encourage greener investments in cities. Reuters

IEA

Global LNG markets to remain oversupplied into 2020s despite strong demand

Mugabe removed as WHO goodwill envoy

Asia consumes some 70 per cent of global LNG

Zimbabwean President Robert Mugabe has been removed as a goodwill ambassador, the World Health Organization said on Sunday, following outrage among Western donors and rights groups at his appointment. WHO DirectorGeneral Tedros Adhanom Ghebreyesus named Mugabe to the largely ceremonial post at a meeting on Wednesday in Uruguay on chronic diseases attended by both men. At the time, Tedros praised Zimbabwe as "a country that places universal health coverage and health promotion at the centre of its policies to provide healthcare to all". But Tedros said in a statement that he had listened to those expressing concerns and heard the "different issues" raised.

Roslan Khasawneh

Global liquefied natural gas (LNG) markets will remain oversupplied into the 2020s due to a surge in production, although soaring demand especially from China may tighten the market earlier than expected, the IEA said yesterday. "We will see massive amounts of new LNG capacity coming to the market ... so we will probably continue to have well-supplied markets into the middle of the 2020s," said Keisuke Sadamori, director of energy markets and security at the International Energy Agency (IEA). "The Qataris, for example, are going to increase LNG liquefaction capacity by 30 per cent by 2024, which we have not included in our 2017 gas market outlook report," Sadamori said in Singapore yesterday. Qatar, which is being challenged by Australia as the world's biggest LNG

exporter, said in July that it planned to increase its LNG output by 30 per cent to 100 million tonnes within the next 5 to 7 years. LNG production in the United States is also soaring, thanks largely to the shale gas boom of recent years. But Sadamori said soaring demand could rein in rampant oversupply, which has pulled Asian spot LNG prices <LNG-AS> prices from a peak of US$20.50 per million British thermal units in February 2014 to below US$10 per mmBtu since 2014. "Especially in China, we are already seeing something like 40 per cent of year-on-year growth in LNG imports. So depending on how demand develops, the timing that the market becomes tighter could be earlier than originally forecasted by the industry," he said. China's LNG imports jumped to their second-highest on record in September as the country ramped

up supply for households in northern areas set to use gas for winter heating for the first time in the country's war on smog. China imported 3.45 million tonnes of LNG last month, according to data released by the General Administration of Customs yesterday, up 37 per cent from the same month a year ago. Sadamori also said that Asia's LNG markets would gradually become more flexible under pressure from the oversupply. Asia consumes some 70 per cent of global LNG, yet very little of it is freely traded. Most volumes are delivered under fixed term contracts between suppliers and big buyers in Japan and South Korea. "We are seeing a gradual decline in the share of the contracts based on fixed destinations ... We are also seeing a trend of contract duration getting shorter overall," he said. Reuters

Business Daily Tuesday, October 24 2017 15

Opinion Business Wires

The Korea Herald The head of South Korea's central bank said yesterday that Seoul is unlikely to suffer any drastic capital outflow, even if the interest rate gap between Korea and the United States is reversed. Bank of Korea Gov. Lee Ju-yeol made the assessment in a parliamentary audit of the central bank, noting that the inflow and outflow of capital is not determined only by the rate gap. In June, the U.S. Federal Reserve raised its key rate by 25 basis points to between 1 per cent and 1.25 per cent, narrowing the rate gap with South Korea.

Philstar Philippines risks losing some P500 billion worth of investments due to the persistent delays in the proclamation of new economic zones, the Philippine Economic Zone Authority (PEZA) said. PEZA director general Charito Plaza said out of 58 economic zones pending presidential proclamation, only six have been released as of Oct. 10. These include one horizontal economic zone in Negros and five buildings that will house IT-business process management firms. “PEZA wishes that all those pending ecozones be proclaimed so investors can start building, because they have waited very long already,” she said.

Taipei Times Three Taiwanese high-tech manufacturers have been included in Forbes magazine’s “Top Regarded Companies” list for this year. Forbes ranked PC vendor Asustek Computer Inc 26th on the list, ahead of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC) at 177th and iPhone assembler Hon Hai Precision Industry Co in 248th place. The magazine’s first-ever top-regarded companies list applied a wide range of criteria, such as company trustworthiness, social conduct, reputation as an employer and market performance of products or services. Forbes compiled the list based on a poll of 15,000 interviewees from about 60 countries.

A red carpet for bankers? That's so 2006, China Nisha Gopalan and Matthew Brooker Bloomberg Gadfly columnists

hina's laying out the red carpet for foreign banks. This time, few will be rushing in. The country's top banking regulator, Guo Shuqing, says the market share of overseas lenders is falling and that isn't good for competition. The government plans to ease ownership and business restrictions to make life easier for them. The share of global financial institutions in China, already minuscule, has been shrivelling for some time, declining from 1.93 per cent of total banking assets in 2011 to 1.38 per cent in 2015. That year, their assets also fell in absolute terms, to RMB2.68 trillion (US$405 billion). The drop came amid a market that's been exploding: Total banking assets soared more than fivefold to RMB232 trillion in the decade through 2016. It wasn't supposed to be like this. China supposedly threw open its banking market in December 2006, under the terms of the country's accession to the World Trade Organization five years earlier. Enthusiasm ran high, with Standard & Poor's calling it "one of the most eagerly awaited events in the banking world." Some were sceptical. "Are the floodgates really opening?" Gadfly's Andy Mukherjee asked in a column that month, pointing out the obstacles to foreign bank profits. The hoped-for bonanza never materialized. While overseas lenders were theoretically free to offer local currency banking services to China's vast population, lengthy approval procedures for branch openings and working capital requirements ensured that authorities could keep a brake on expansion. Local lenders picked up the slack, capturing almost all of the growth in banking assets over the ensuing decade. The China Banking Regulatory Commission, headed by Guo, may now be ruing its success in holding back the foreign horde. Frustrated by lack of progress and hobbled by the global financial crisis, overseas banks have lost their ardour for the country and exited their investments in Chinese lenders. Citigroup Inc. sold its stake in the former Guangdong Development

“

The Times Of India India's markets regulator Sebi (headquarters pictured) has launched an investigation into a scam which involves unscrupulous agents who are making a killing by fraudulently transferring shares from the account of a deceased holder, which are in physical form and have not been claimed by the nominee or the legal heir, into illegal accounts. These agents use unlawful means to get hold of shares unclaimed by legal heir of the deceased, convert them into demat (shares into electronic form) mode to sell in the market, transfer the funds into bank accounts set up for the purpose, and make cash withdrawals.

Bank last year, a decade after becoming the first overseas financial-services company to manage a Chinese bank. Deutsche Bank AG offloaded its 20 per cent holding in Huaxia Bank Co. in 2015. Foreign institutions tempted to give China another try confront a greatly changed landscape: an economy where growth has slowed and credit creation on steroids has fuelled concerns of a resurgence in bad loans, to the extent that even the central bank governor is talking of a possible "Minsky moment." One company that will take comfort from Guo's words is HSBC Holdings Plc, which has the largest branch network among overseas banks and entrenched expertise in trade finance and offshore yuan trading. Count Standard Chartered Plc and Hong Kong-based Bank of East Asia Ltd. among the other likely beneficiaries. Investment banking is another area of promise, especially as China opens up bond trading to overseas participants. HSBC became the first foreign firm allowed to control a securities venture in China this year (though it is still waiting for its licenses to be approved), while JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon dreams of controlling a China business unit. But for most, as Gadfly has noted, it's too little, too late. Rather than risking their reputations and balance sheets to compete with China's giant and protected home-grown banks, foreign entrants may be better off looking for partners -- and not among traditional financial companies. Technology firms have become the biggest competitive threat. It's no coincidence that the two hottest initial public offerings in recent months have been by fintech firms part-owned by Alibaba Group Holding Ltd. affiliate Ant Financial: Qudian Inc. and ZhongAn Online P&C Insurance Co. Tie-ups in fund distribution, credit cards or payments with the likes of Alibaba or Tencent Holdings Ltd. -- both of which have banking licenses -- all hold promise. The days when foreign banks dreamed of nationspanning Chinese branch networks serving more than a billion potential customers are long gone. Technology is the new frontier. Bloomberg Gadfly

Technology firms have become the biggest competitive threat

”

16 Business Daily Tuesday, October 24 2017

Closing Trade

Brie agreement: China lifts soft cheese ban

to customs authorities clarifying that bacterial cultures used for the production of these cheeses were not harmful to consumers' health, thus Fans of soft cheeses in China have reason to celebrate after the country reversed a ban on mould-ripened cheeses, allowing imports of allowing trade to resume, according to the delegation. Camembert, Brie and Roquefort, European Union officials said yesterday. The statement added that China's cheese quality standards are "outdated," and the delegation and French embassy will organise a From early September, businesses in the country were forbidden from seminar with Chinese experts to "(limit) the risk of such events reimporting cheeses made with certain moulds and bacteria. occurring in the future". The ban was lifted following meetings last week between European Commission representatives and Chinese quarantine and health officials, The European Union Chamber of Commerce in China previously said efforts were underway to revise China's national food safety standards the EU's China delegation said in a statement. for cheese. AFP The National Health and Family Planning Commission issued a note

Gender gap

In Communist China, it's a man's world at the top Gender equality is enshrined in the constitution but analysts say traditional social structures have kept women from gaining more space in politics Activists jailed, silenced

Joanna Chiu

hen Xi Jinping warned against "pleasure seeking" in a stern message to the Communist Party congress last week, the audience included few women and some notable absentees -- officials ousted by graft scandals involving illicit affairs. The scene was a reminder that China's leadership remains a man's world, where women have been excluded from the highest echelons of power and men have abused their positions in sex-for-favours scandals. Women represent only a quarter of the 2,300 delegates attending the week-long congress held just twice a decade, highlighting the yawning gender gap in the world's most populous nation. Since the Communists took power in 1949, under Mao Zedong who famously declared that "women hold up half the sky", no woman has ever risen to the top ruling council. Delegates at the congress will choose members of the party's Central Committee, where women account for just 4.9 per cent of the 205-strong membership -- down from 6.4 per cent in 2012. The committee then has the task of selecting the 25-person executive Politburo, which

Delegates attend Xinjiang open delegation discussions of the 19th National Congress of the Communist Party of China (CPC) at the Great Hall of the People (GHOP) in Beijing, China, 19 October 2017. Source: Lusa

currently has only two women, and its elite standing committee -- which boasts seven ageing men. When the new Politburo Standing Committee line-up is unveiled today or tomorrow, no woman is expected to break the glass ceiling and join them. Guo Jianmei, a leading lawyer and women's rights advocate, had prepared a letter to the party congress criticising China's lack of attention to women's participation in politics. "The letter describes this situation but there is no way to submit it, because no party representative is willing to help us," Guo told AFP. "China has generally not given any thought on how to promote women's leadership status."

'Power-for-sex'

Gender equality is enshrined

in the constitution but analysts say traditional social structures have kept women from gaining more space in politics, pressuring them to prioritise family roles over their careers. The official All China Women's Federation coined the derogatory term "leftover women" in 2007 to describe unmarried professionals after the government announced a campaign to improve population "quality" by encouraging educated women to have babies. A party congress delegate from Shanghai said she did not see a problem. "China has already achieved equality between the sexes. The government supports women's aspirations," she told AFP, declining to give her name. While women have been left out of top jobs, Xi's anti-cor

Reuters ruption drive has revealed a large number of cases involving men committing adultery, which is against party rules. "All thinking and behaviour in the vein of pleasure seeking, inaction and sloth, and problem avoidance are unacceptable," he intoned last week, reminding party members to lead by example. The most prominent figure netted so far in the graft campaign is 74-year-old former security tsar Zhou Yongkang, who was accused of committing adultery with a number of women "in power-for-sex and money-for-sex trades". And last month rising political star Sun Zhengcai from the Chongqing megalopolis was expelled for "serious violations of party discipline" including allegations that he took bribes and "exchanged money for sex", state media said.

The litany of alleged crimes in corruption cases can sometimes be cover for factional score-settling. But official data shows that men in power hand ample ammunition to their critics. A 2013 study from Renmin University in Beijing found that 95 per cent of corrupt officials had extramarital affairs, and at least 60 per cent had kept a mistress, which typically involves providing an apartment and an allowance. "It's definitely still prevalent," said Beijing-based writer Zhang Lijia, who conducted research on China's sex industry for her novel, "Lotus". "The traditional practice of men showing their social standing with numerous concubines has returned in the form of mistress culture." In recent years, authorities have jailed and intimidated outspoken critics on women's issues. Ye Haiyan, one of China's most prominent feminist activists, gained fame for her brazen protests against a string of child sexual abuse cases. But she said she does not dare to even write blog posts about women's rights issues now. "They get deleted right away, and authorities have pressured multiple landlords to evict me," she said. "The harassment only stopped after I moved in with my husband." AFP

Angola

Transport

Strategy

Central bank injected 85 per cent more hard currency last week

Singapore to halt car population growth from next year

Armani plans transfer of stake in fashion firm to his foundation

The sale of foreign currency by the National Bank of Angola (BNA) to the country’s commercial banks rose by over 85 per cent last week to 226.3 million euros, including covering salary transfers for expat workers. In the previous week the central bank’s foreign cash injections totalled 122.1 million euros and two weeks ago they totalled 111.9 million euros. According to the report from the central bank, to which Lusa had access yesterday, the foreign currency provided – exclusively in euros since March 2016 – was the equivalent of US$252.9 million and was mainly used to oil sector operations (152.2 million euros), and food imports (27 million euros). Imports for the Agricultural sector (12 million euros) and the Fishing sector (5.8 million euros) were also covered, according to the Angolan central bank. After several weeks without currency being made available to ensure foreign transfers to pay the salaries of expatriate workers, the central bank provided 9 million euros for that purpose last week. The benchmark exchange rate for Angola’s currency, the kwanza, at the end of last week remained unchanged at 166.748 kwanzas per dollar and 186.302 kwanzas per euro, and have seen no significant changes over the last 18 months. Lusa

Singapore, one of the world's most expensive places to own a vehicle, will not allow any growth in its car population from February, citing the small city-state's land scarcity and billions of dollars in planned public transport investments. The Land Transport Authority (LTA) said it was cutting the permissible vehicle growth rate in the city-state to 0 per cent from the current 0.25 per cent per annum for cars and motorcycles. The rate will be reviewed in 2020. Singapore tightly controls its vehicle population by setting an annual growth rate and through a system of bidding for the right to own and use a vehicle for a limited number of years. It is one of the most densely populated nations on the planet and already has an extensive public transport system. Currently, 12 per cent of Singapore's total land area is taken up by roads, the LTA said. "In view of land constraints and competing needs, there is limited scope for further expansion of the road network," it said. Singapore, whose total population has risen nearly 40 per cent since 2000 to about 5.6 million now, counted more than 600,000 private and rental cars on its roads as of last year Reuters

Giorgio Armani's succession plans include a transfer of part of his high-end fashion empire to his charitable foundation in a bid to prevent any takeovers or a break-up of the group, the designer told a newspaper. Last year, Armani, 83, created a foundation in his name which said he planned to lead for the rest of his life. With an estimated fortune of close to US$6 billion, he is still active in what is Italy's second-largest fashion group, but has not named a successor. "What has been created is a mechanism that will encourage my heirs to maintain harmony and will avoid the group being bought or broken up," Armani told Corriere della Sera daily in an interview published yesterday. Armani's does not have children of his own. His nieces Roberta and Silvana both work at the group while their cousin, Andrea Camerana, recently left but is still a board member. Long-time assistant Pantaleo Dell'Orco heads the men's lines and sits on the foundation's board. "Believe me it is horrendous having to decide what to leave, whether it's fair or not, and every five minutes having to confront the reality of a man to whom something could suddenly happen," he said. Reuters